High Demand, Low Inventory Makes For A Fast-paced Housing Market

By AARON TAYLOR

We are used to seeing reports that show Northeast Tennessee trending behind the state and especially the Nashville metro housing market. Nashville has one of the hottest housing markets in the Southeast, but our local market outperformed the housing segment by a marginal percentage.

Aaron Taylor
2018 NETAR President

Nashville closings were down 4.5% from May of last year and 1% lower than the first five months of last year.

Here in Northeast Tennessee, closings were 12.7% higher than May of last year and 9.9% better than the first five months of last year.

Statewide closings were down 1.5%. Tennessee Realtors®’ have not generated a year-to-date comparison monthly report.

What these reports have in common is inventory is throttling home sales. What is unique about the Northeast Tennessee market is the tight inventory has not crimped sales as much as it has elsewhere. In fact, May was the best single month for local closings in 10 years. Since June is typically the best closing month of the year, odds are, we will see June’s closing move past 700. Most local Realtors® agree if inventory was greater, the number of sales would be even more.

The local inventory picture was a little better in May. For the first time in a couple of months, new approved contracts did not absorb all the new listings. The improvement was only enough to bump inventory to a 4.5-month supply. A closer look into the city market level shows a different picture.

While Erwin is the smallest of the area city markets, it had the tightest inventory in May – 1.8 months. According to Realtor Property Resource (RPR), the median number of days for an Erwin listing in RPR was 36 days.

Here is how inventory and median days on market looked in the other city markets:

Johnson City – 2.8 months of inventory. Median days in RPR - 45.

Kingsport – 3.3 months of inventory. Median days in RPR - 58.

Greeneville – 3.5 months of inventory. Median days in RPR – 76.

Elizabethton – 3.1 months of inventory. Median days in RPR – 76.

Bristol, TN – 3.3 months of inventory. Median days in RPR – 64.

Bristol, VA – 3.7 months of inventory. Median days in RPR – 62.

Another illustration of how record level sales have affected the local market is looking at listings in two principle price ranges.

The region’s primary price tier is $200,000 and below. Historically, it accounts for a little more than three of every four existing home sales. In May there were almost 1,600 listings in this price range - 287 fewer than last year.

The next price tier is $200,000 to $399,999. The Twin Cities is the only market with a few more listings in this range than last year. Listings in Greeneville and Johnson City are flat. Kingsport was down enough to wipe out the Twin Cities’ increase. Although there were almost a thousand listings in this price range, it was 40 fewer than last year.

Those two price ranges are where most of the demand is, and they accounted for 96% of all existing home sales in the 12 months ending in May. As reports show, the listings-sales pace is picking up.

Savvy buyers and sellers are encouraged to partner with a Realtor® to ensure they get the most current listing information and what is working and what is not working in negotiations. It is the strongest combination to seize the best opportunities in today’s fast-paced market.

Aaron Taylor is the 2018 president of the Northeast Tennessee Association of Realtors. The real estate education and trade group is the voice for real estate in the Tri-Cities and has over 1,200 local Realtor® members and almost 100 affiliates.